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Tuesday, February 4, 2014

Workers' struggles will grow as capitalism fails to find a way out

Source: Financial Times. Why is Marx there?

By Richard Mellor

Afscme Local 444, retired

Every ruling class believes that the system they govern is the end of
civilization.How can they believe
otherwise?To concede that there is a
more efficient and productive system of production would be class suicide.As the dominant ideas in society are the
ideas of the ruling class, many workers also hold this view.Many peasants held it as well under the rule
of the feudal aristocracy. If there is one thing history teaches us it is that
the only constant is change

The world today is in turmoil.I know it is because Bloomberg Businessweek’s
editor Peter Coy says it is so.Of
course, what is turmoil for the ruling class is revolutionary progress for the
masses, for workers in our case. Coy and other theoreticians of the 1% are
debating the depth of the turmoil and what it means for the global
economy.Will it destabilize global
capitalism further?

The emerging market economies that only yesterday were the
saviors of global capitalism are now threatening it. ”Most at risk are poorly governed countries such as Argentina and
Ukraine….” Coy writes in this week’s issue of BW.Surely though, if we’re going to talk about
poorly governed countries, isn’t the US in that category? Obviously it’s not
just about poor governance.

It’s the countries that became “addicted to hot money” that are rocking the boat writes Coy.In their rapacious quest for profits, the
owners of capital were plowing cash in to emerging economies whose economies
were growing like crazy, and the US Federal Reserve and other central banks
gave them cheap credit.Remember the
BRICS?Much of this growth was due to
China which has been eating up the world’s raw materials. At one time China was
consuming over 40% of the global production of concrete.China is plagued by overproduction and rising
real estate prices and 2014 opened with Chinese factory output
contracting.We have all read of new
towns empty of residents and the town with the replica of the Eiffel Tower with
no people in it, not the tower, the town.This has driven down the price of raw materials which are major exports
for emerging market economies.Australia’s
mining boom which was the only bright spot when I was there a couple years ago
was due to China’s growth.

Before this, the 1% plowed some $3 trillion in to the US housing
market and we all know what happened there.

The owners of capital are doing what they have to do as the “emerging” economies, (they don’t “emerge” for long) don’t provide
adequate returns; they are finding more lucrative places for their investments
like the US.Apparently, “the lucky few countries that have trade
surpluses, fat reserves of foreign exchange, and stable governments” are
the beneficiaries of these capital flows. The “emerging” countries are in a bind as one way to entice the investors
back is to raise interest rates on their bonds but this could slow growth
further.What a mess.

In the aftermath of the Great Recession there were a whole
series of articles in the major capitalist journals aimed at boosting the
morale of the 1%, especially the young coupon clippers who had never
experienced a recession or slump and were convinced that what Lawrence Summers
referred to as a “sumptuous feast” would
last indefinitely. “The rise of the internet was perceived to have
altered the business cycle” the Financial Times’ Gillian Tett wrote back
then. But as the system tottered on
the edge of the abyss, pulled back through the lifeline of public funds and the
destruction of excess production, the 1% searched for answers and we read more
about Marx’s economic views in journals like the Financial Times than we ever
had in the past. “
Read the Big Four to know Capital’s Fate”,
one FT article was headed accompanied by the cartoon above.The "Big Four” are the economists Adam Smith, Joseph Schumpeter,
John Maynard Keynes and Karl Marx.

Many are now reaching for the history books with a new found enthusiasm—or
desperation---to assess how the crisis will play out.” Ms Tett wrote back
in 2007. “Indeed, as recently as this
spring…” she wrote with the confidence of the bourgeois intelligentsia, “… it was rare to find any financial trader
who spent much time pondering events more than a decade old---or beyond the
data points typically found on a trading terminal.” (Doomed To Repeat it?: FT
8-27-07)

There should be no reason for surprise.Marx wrote of capitalist crisis almost 200
years ago,“It is enough to mention the commercial crisis that by their periodical
return put on its trial, each time more threateningly, the existence of the
entire bourgeois society.”The more astute theoreticians of capital
know this. Lehman Brothers, a major capitalist firm, that fell in the
crash, pointed out that there have
been 60 market crashes since 1622. “This
neo-modern credit market is not very dissimilar after all from its classical
predecessors” a Leheman Brothers analyst wrote, quoted by Ms Tett.

As for being addicted to money. Capital, or money as an
expression of value, is a necessary part of production.What the population of these countries are
addicted to in reality is shelter, education, water, health care and all the
other basic needs of human society. Capitalists don’t invest capital in order
to provide these needs; they invest it to make profit.If the profit is not there, these needs go
unmet; it’s as simple as that.

But the “turmoil”
that BusinessWeek refers to is troublesome. The world is undoubtedly afire as
workers respond to the increased attacks on living standards, especially for
those already in abject poverty. The gathering of the 1% in Davos were (Bono
was there along with Goldie Hawn and Matt Damon, what a bunch.) forced to
address this question of inequality as the hatred of the rich and their obscene
billions is widespread.We now have a
situation where 85 people have as much wealth as $3.5 billion.It’s hard to conceive of such a thing and it
certainly isn’t civilization. Here in the US there is no escaping that there
will be an explosion at some point. Infant mortality and the death rate of
children in Detroit is staggering we read recently and the environment is being
poisoned by agri-business and the energy industry and the environmental
movement is perhaps as active and with direct action struggles more than it has
been for years.

And despite their seemingly collective concerns, the
capitalists from the various nation states are finding all sorts of ways to
retreat in to protectionism as capitalist globalization stalls and the ground
is paved for another crisis.All sorts
of gadgetry is being used to skirt trade laws and undercut rivals forcing
rivals to retaliate. The lessons of Smoot Hawley loom here and the capitalist
class tries to avoid this like the plague but their actions are driven, as are
their wars by the laws of the market.

I am not an economist, but I don’t need to be to recognize
the madness of all this.It is madness
not because individuals are mad, or because of a struggle between two imaginary
supernatural forces, but because the system of production, the capitalist mode
of production, cannot advance society.The capitalist mode of production cannot feed clothe or house most of
the people of this world. It cannot provide water and food or basic health care
yet it has the resources to provide all these things and the science to protect
the environment.

We starve amid abundance.

But capitalism is a system of production based on profit and
the never-ending accumulation of capital in to the hands of fewer and fewer
people.We are looking at another crisis
within the next couple of years it seems, an economic crisis as well as
continued regional wars and destruction as US capitalism, the predominant
source of terrorism and its rivals jockey for control of the world’s resources.

The only solution to this boom and slump and the abject
misery that accompanies it is that capital itself, and the labor process, be a
collective process.It would be nice if
warren Buffet could see this.